Overview of accommodation costs
Accommodation costs are the amounts residents may pay for their room in an aged care home. These costs depend on:
- a resident’s income and assets, assessed through a means assessment by Services Australia
- the accommodation arrangements a resident is on.
Every resident negotiates and agrees to a room price before entering care. However, not all residents are required to pay the full price themselves – this depends on their financial situation and eligibility for government support.
Accommodation arrangements
The way accommodation costs are charged depends on a resident’s accommodation arrangements. These are based on when they entered care or if they’ve opted into newer arrangements since then.
Learn about which arrangements apply to a resident.
Accommodation arrangements affect:
- the ways a resident may pay their accommodation costs
- whether daily accommodation payment (DAP) indexation and refundable accommodation deposit and contribution (RAD and RAC) retention apply.
Changes from 1 November 2025
New accommodation arrangements will be introduced when the new Aged Care Act commences on 1 November 2025.
A resident on the 1 November 2025 accommodation arrangements may contribute to their accommodation costs through an accommodation payment or contribution or a combination of both.
RAD and RAC retention and DAP indexation will apply to residents on these accommodation arrangements in most circumstances.
Means assessment and eligibility for support
When a resident enters aged care, a means assessment is completed to determine:
- whether they are eligible for government assistance with accommodation costs
- how much they will need to pay for their accommodation and care
- which payment options are available to them.
Based on the outcome of this assessment, a resident may fall into one of 2 categories:
1. Not eligible for government support with their accommodation costs
These residents are required to pay an accommodation payment.
2. Eligible for government support with their accommodation costs
These residents qualify for low means status and may pay:
- nothing for accommodation, or
- a contribution towards their accommodation costs.
If a resident pays an accommodation contribution, the government covers the difference between the maximum accommodation supplement rate the provider is eligible for and the resident’s contribution.
If a resident pays nothing for their accommodation, the government pays the full accommodation supplement rate the provider is eligible for.
See examples of how fees and accommodation costs are worked out.
Residents with low means
A resident’s low means status is fixed at the time they enter the aged care home. It does not change, even if their financial situation improves or someone else pays a lump sum on their behalf.
However, a resident’s accommodation contribution may change over time, depending on changes to their income or assets.
Charging interim accommodation costs
If a resident enters care before they have their means assessed, their provider can charge the agreed room price as a daily accommodation payment (DAP) as set out in the accommodation agreement.
If Services Australia later determines the resident has low means status, the provider must refund any overpaid amounts. The resident’s means status and accommodation costs can be backdated to the day they entered care.
Payment options
Residents may pay their accommodation costs by:
- accommodation payment (paid as a lump sum, daily payments or a combination)
- accommodation contribution (paid as a lump sum, daily payments or a combination)
- accommodation bond
- accommodation charge.
Maximum room prices
Aged care providers must publish the maximum price for each room they offer. This helps people compare options and understand the highest price they may be asked to pay as an accommodation payment.
Learn about published prices and maximum accommodation payment amounts.
Note: the maximum room price won't determine the maximum price a resident may pay as an accommodation bond or charge.
Accommodation agreements
An accommodation agreement outlines room details, costs and conditions. Providers must ensure residents understand and agree to terms, and update agreements when needed. It complements the resident agreement.
Learn about accommodation agreements.
Managing accommodation costs
Providers are responsible for collecting, reviewing and managing accommodation costs.
Learn about managing accommodation costs.
Charging fees
In addition to accommodation costs, residents may also pay fees for their care. A resident may pay:
These fact sheets outline the fees a resident may be asked to pay for permanent residential care (under different fee arrangements) and for residential respite care.